Cable operator Altice has told the FCC that denying the T-Mobile-Sprint merger is the best way to promote the launch of competitive 5G wireless service.
T-Mobile and Sprint have been telling the FCC and Justice and anyone else within earshot, that allowing them to merge is the fastest way to 5G, but the cable company begs to differ, saying its existing deal to use Sprint infrastructure to provide wireless service later this year is a better option, and one that could be thwarted by the deal.
Altice plans to enter the wireless market by the end of the year through an MVNO (mobile virtual network operator) agreement with Sprint. Altice argues that the iMVNO (infrastructure MVNO) model, "when properly enabled and supported, functions as an on-ramp to greater facilities-based wireless competition over the long-term" and that merging T-Mobile and sprint would decrease the comptition in the pre-merger wholesale market that is vital to that MVNO model, which relies on access to existing infrastructure.Analyst.
"The merger will reduce nationwide wireless competition at the retail level from four to three, while simultaneously precluding new retail competition from three or more new iMVNO competitors," it told the FCC. "able operators using iMVNOs to enter the wireless market are best positioned to provide true retail competition to the nationwide wireless carriers.
Consequently, at a time when retail wireless competition is on the precipice of increasing from four nationwide providers to, for instance, seven [via deals with new iMVNOs], the merger will instead consolidate the market into just three providers."
If the FCC does approve the merger, says Altice, it should be conditions requiring the merged company to continue to support a competitive retail market.
Analyst Craig Moffett says the Altice-Sprint MVNO is indeed an example to the rest of the industry of how that model can work, he said in a blog post earlier this month.
“Sprint gets a huge cost and time-to-market advantage versus Verizon, AT&T, and, if the deal is rejected, T-Mobile," said Moffett. "Altice USA gets an MVNO agreement which gets cheaper and cheaper over time as more and more traffic is carried by their joint small cells.”
As Multichannel News' Mike Farrell reported, which was cited in the Altice filing to the FCC, Moffett says an Altice/Sprint-like deal that encourages the buildout of small cells would be a more cost-effective path toward 5G than other cable-telco MVNO models, notably the Charter/Comcast/Verizon MVNO, "and that cost advantage would grow over time," he said.
Altice says it would also be a better path to 5G than T-Mobile-Sprint.
The FCC is currently vetting a further request for information from T-Mobile and Sprint on their plans for integrating the two networks. The FCC is currently in day 141 of its informal 180-day shot clock on merger reviews.